As a real estate investor, building the right relationships with the right people is vital to your success. Networking helps you learn to communicate and interact with others, gives you access to new contacts (and new deals), and improves the overall profitability of your business. Of all the people you should add to your network, service providers are among the most important. Here’s what every investor should know about networking.
Construction Company or Contractor
If you are still relying on bids from random contractors for your restoration or renovation projects, you are missing on a huge potential for savings. In fact, the relationship between investors and contractors is mutually beneficial, especially in areas where construction demand is relatively low. If you can provide a contractor or construction company with regular work, that company or contractor is far more likely to provide you with amazing discounts that can save you tens of thousands of dollars over the course of your investing career.
As an example, if you fix and flip two homes a year on average and you can save $2000 on each project by hiring a trusted contractor, that’s $4000 a year, or $60,000 over the course of a 15-year investing career.
Private Lender
Veteran real estate investors build relationships with one or two private lenders, and they rely on those lenders to provide them with fast, affordable funding. Loyalty is very important in the real estate investment industry, so as your relationship with your preferred lender grows, it is mutually beneficial. The lender knows they can count on you for timely payments based on agreed-upon terms, and you can count on the lender to provide you with the perfect loan product for your latest project, whether it’s a ground-up construction home or you’re buying a 50-unit apartment building.
Real Estate Agent or Broker
Finally, as a real estate investor, it’s important to network with as many real estate professionals as you can. Building these relationships is a great way to ensure that you have access to off-market properties or that you are among the first to learn about an exceptional new property on the market. Time is of the essence in real estate, so the faster you can make the first move, the more likely you are to profit.
Once again, the relationships between real estate professionals and investors is beneficial for everyone. Real estate agents can count on your regular purchases – transactions that are vital to their commission-based income and professional success. As these agents get to know you, they will increasingly know what kinds of properties you prefer, and they will go out of their way to give you the first opportunity to buy.
Professional networks are important in every business and industry, but for real estate investors, networks are everything. Networking is much more than attending investors’ conferences or reaching out to experienced investors for mentorship; it involves seeking out trusted service providers and building relationships with them, whether they are contractors, lenders, or real estate agents.